1099 Form Question

Actually, I do understand that point.

 

Here lies the problem.

They are not a withholding agent when paying by 1099. They are trying to operate under the scope of the IRS. They avoid state mandated workmen's compensation laws and unemployment taxes as well.

The IRS comes in an restates the pay to employee wages. They then assess withholding taxes against the payments. The tax is then added to the amounts owed. At this point penalties are assessed and interest calculated.

The IRS forces changes to the 1099 and now it is considered a W-2. They then issue the new documentation to the employee. The employee is not under audit. The employee then must change their return to meet the new issued documents. It will mean they are no longer a 1099 subject to some of the taxes and that they now are going to get credit for withholding payments.

The adjustment made for the taxes is additional income to the employee and the net result is a refund to them.

I never saw an employee upset about the change the IRS implemented. I only heard from the employer and they were never happy about the change made and the employee being happy.

 

I have been keeping up on this thread and I myself would not work for a company on a 1099 (my preference). If I owned my truck then I would have all the insurance and taxes and what not on me that is understood.

But my biggest question is when is this thread gonna be turned into a movie? lol

 

It is a common practice in the frac sand industry to work as a contractor if you drive for an owner operator. I have done it for a total of 5 years. The IRS hasn't had a problem with it. You can take the standard daily deduction of about $65 per day for every night that you're away from home. One year I claimed a $15K deduction. That is what saves you from having to pay much if anything in taxes at the end of the year. Look it up in the IRS publication 463. The only record that you have to keep is your log book showing that you were away from your home town or the town in which your company is located. Make sure you file a schedule C when you do your taxes.

The easiest way to make sure that you're getting all of your money is to go to H&R Block or any other tax preparer that knows what they are doing. I will warn you that I went to a Jackson Hewitt one year and they didn't know what they were doing. I ended up doing it myself that year. However, it is less of a headache to just let someone else do it for you. Ask your tax preparer to show you the law in the IRS publications. A good one will.

If you work for a company as a company driver and the company doesn't pay you a per diem, you can also use the standard deduction (or allowance) as well. Some companies will give you an option to op out of their per diem so you can claim it at the end of the year.

The laws in Texas require the owner operator or person that has the truck leased onto the company to take out occupational insurance on the driver, no matter who is driving. Companies are required to make certain the driver is covered at the truck owners expense.

 

I have given the rules. I have been on the audits when the companies who do this have been caught.

It has happened in states across the country. Has it happened in your area, maybe not. It is the rules and they are enforcing it.

My audit, I had a valid lease. I own the truck. I provide the truck. I choose the load. I choose whether to work or stay home.

They wanted to make me an employee.

It is industry wide practice for some to run illegal on the logs. Does it make it right?

I do not have to look up things in the Publication 463. I am in appeals court with the IRS because they changed my tax home from where I live among other things.

I have been a professional income tax preparer and accountant since 1982. Accounting before that. I used to make a living fighting the IRS.

You can lead a horse to water, you cannot make him drink.

Do whatever you want. I am required by my license and certification to provide the correct information. You do not have to listen.

 

Why the heck did they change your tax home?!

 

Their reason is that I do not pick up loads where I live, but where the terminal is. Almost every load comes from the Elkhart, Indiana area. Therefore, they removed all per diem, motel bills and anything from there as personal. The agent said I had no deductions within 45 miles of the terminal or at my home.

If I worked on the truck at home, the cost of the repairs was considered part of the business expense, but had nothing to do with the actual work the truck did under the lease. Makes no sense. Because if I change the fan belt in New Mexico, it has something to do with it, but not when I was at home. Her comment, was to move.

They are ignoring a revenue ruling. It is revenue ruling 73-529.

[FONT=&quot]Revenue Ruling 73-529 identifies three criteria to determine whether there is indeed a tax home:[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Whether the taxpayer performs a portion of his business in the vicinity of his claimed abode and uses it for lodging while performing business there.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Whether the taxpayer's living expenses incurred at the claimed abode are duplicated because his business requires him to be away from it.[/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]Whether the taxpayer has abandoned the area in which both his traditional place of lodging and his main home are located, or whether members of the taxpayer's family live at the main home or the taxpayer often uses the home for lodging. [/FONT]
[FONT=&quot] [/FONT]
[FONT=&quot]If all three factors are satisfied, the tax home is where the taxpayer regularly lives and travel expenses can be deducted.[/FONT]

 

You didn't vote republican did you, lol. I'm just joking with you. What you say may be true but I started taking my taxes to H&R and let them do them. When they are done I buy the insurance where they have to go to court with me if the IRS comes back on me for any reason. I have all my documentation, log books, receipts etc. I'm not sure why the IRS would accept someone's tax return (many people for that matter) that files that way if it is illegal, but that's just me. Again I'm not saying that you're not right. I'm not a CPA. I do know that recently PTI/Amerigas started paying their owner operators just like they do their company drivers. In addition to that they pay them separately for their truck. When I asked one of the O/Os about it they told me that it had something to do with the laws that the railroad commission had recently put in place. Maybe he was wrong. Maybe it had to do with labor laws. I will look into it. Thanks for the info. Roadmedic.



Here is one link that I'm finding helpful http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-%28Self-Employed%29-or-Employee%3F

 

As far as what triggered it. My guess is that I liked the facebook page "Abolish the IRS". NSA probably caught me and let them know.


Here is one I have posted before.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-%28Self-Employed%29-or-Employee%3F

 

I did the exact same thing...went to HR Block , got all the deductions etc. Most importantly, I save all my money that year and had no problem paying my taxes..state and federal.